Israel denies payments to family of Prisoner X

Cameron Houston

ISRAEL has denied making secret compensation payments to the Melbourne family of Ben Zygier over his 2010 death in a maximum-security prison, amid claims he was about to give evidence on the use of fake Australian passports by intelligence agency Mossad.

Israeli television station Channel 2 reported that no payment would be made unless negligence could be proven in Mr Zygier's alleged suicide, which occurred while the 34-year-old was under 24-hour surveillance in a ''suicide-proof'' cell.

The television report conflicted with claims by Israeli newspaper Haaretz that Mr Zygier's family had received ''millions of shekels in compensation'' following a secret 18-month judicial inquiry into the death.

Citing sources close to the affair, Haaretz also claimed Mr Zygier was negotiating a plea bargain with Israeli authorities, despite reports he had rejected previous offers of a deal.

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Mr Zygier's family has refused to discuss his suspicious death, while his former lawyer Roi Belcher did not return calls to Fairfax Media.

Israeli authorities have only confirmed that their State Attorney's Office was investigating negligence as a possible cause of death, after imposing a court-ordered ban on any mention of his death. The secrecy has fuelled the mystery surrounding Mr Zygier's transformation from a Monash University law student to ''Prisoner X''.

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Mr Zygier moved to Israel in his early 20s, where he lived on Kibbutz Gazit in the Galilee and served in the Israel Defence Forces, before marrying an Israeli woman in 2006.

In 2002, Mr Zygier returned to Australia and worked at Melbourne law firm Deacons. He returned again in 2009 to study for an MBA at Monash University.

It was during these trips that he attracted the attention of the Australian Security Intelligence Organisation (ASIO) after changing his name on three occasions and obtaining new passports. One of the passports is believed to have been used by Mr Zygier when he was suspected of spying for Mossad in Iran.

Less than a year before his death, Mr Zygier is believed to have been questioned by ASIO.